Last week we attended Innovate Finance, a global summit that brought together industry leaders and financial services together to discuss the future of the fintech industry. We shared our five key takeaways from the event, which covered why innovation is crucial for fintechs as well as how working on an API-based economy could save costs when re-examining the infrastructure of business models. Today we’re diving deeper into the subject of blockchain by speaking to two blockchain start-ups on how they aim to bring the technology to the market quickly and effectively.
Adi Ben-Ari, Founder and CEO of Applied Blockchain
Can you tell me about Applied blockchain?
I’m the co-founder and CEO of Applied Blockchain, which was founded two years ago. My background is in science and IT, and the idea behind the business was to build solutions using smart contracts and private blockchain technology. I was previously working for a bank and I built a couple of blockchain platforms that I previewed internally, however banks weren’t ready at the time to implement this technology. So I showed it to others in the industry and started getting requests for business. Then I formed Applied Blockchain and we’ve been growing ever since. We’re building out solutions for our clients and are currently working with a large energy company now.
Why are traditional banks hesitant on integrating blockchain?
Banks have a huge amount of legacy, such as legacy businesses and IT systems, with a fantastic business model which is working today with thousands of employees. So to shift any of that around is extremely difficult. The main component of blockchain technology is that it’s a core underlying technology. It’s not similar to a mobile app that you can apply on top of an infrastructure that you already have. It’s something that sits underneath, and most banks haven’t changed their core systems for decades, so this simply isn’t something that can be done overnight or in a few weeks.
However, I think banks are now looking at blockchain technology, and are looking at specific areas of businesses of which this technology can be applied. Blockchain is still very new and it’s still evolving, so it’s very early days.
We’ve seen a lot of people talk about partnerships at the conference, do you think we’ll see a lot of collaborations this year?
Yes, and there’s a lot of collaboration and partnerships happening already. I think it’s interesting as it’s the only way for blockchain technology to move forward within a certain industry or group. Collaborations need to happen to excel certain parts of the business.
And finally, what are your main trends/ predictions for 2017?
I think that the incumbents will keep looking at blockchain technology, surely but slowly. It’s going to take to take the start-ups who are invested in this space to really grow and bring it to life. Due to the nature of industry with the heavy regulations in place it may take time, but that will also allow blockchain technology to fully develop before hitting the market.
Guy Halford-Thompson, CEO, BTL Group
Can you tell us about yourself and your business?
I’m the co-founder and chief executive of BTL. BTL is a blockchain technology company that was founded in 2015. I’ve been in the space for about six years. We previously started another company solely in relation to bitcoin, which was one of the biggest bitcoin brokerages back when bitcoin was becoming mainstream.
We're currently working on building an enterprise-focused blockchain platform called Interbit. We’re currently piloting the platform both in the energy space and in the financial services space. The focus of the pilot is to reduce complexity and cost within the business.
Blockchain has been around for a while but only recently has gained a lot of momentum. Why do you think this is?
It’s seeing the magnitude of opportunity that the platform brings. I think the biggest benefit, especially for the bigger companies is the IT infrastructure. I’ve never met a large company that has said “I’m happy with my IT budget, we don’t want to save costs”.
There is a huge pressure to save costs in infrastructure and IT, and blockchain is a solution to that. It’s a way for companies to drastically reduce the complexity of what they’re building and therefor save on costs. There’s a lot of infrastructure that supports the platform, such as back-ups, auditing, security, keeping track of data; these are all aspects that we’ve invested in heavily to build around our infrastructure. With blockchain, you already get a lot of the framework and structure in place so you can just focus on the business logic and build applications a lot more efficiently and quickly.
There’s not a single company that doesn’t have to share data with their counterparties or regulators, and it’s very hard to build systems to share data using traditional technology: but it’s very easy to build new systems to share data using interbit and blockchain technology.
What trends/ predictions do you have for this year?
In terms of the blockchain space, things are moving very quickly. Adoption of technology understandably takes time. An innovation can be around for years before the first mainstream use. It’s the same with mobile payments; mobile phones have been around for 20 years but we’ve only just starting to see the evolution of mobile banking. Blockchain has been around since 2008, and nine years later we’re right on the cusp of mainstream adoption of the technology. I believe that the adoption of blockchain will affect all industries from healthcare to finance to banking, and we’re going to see this trend accelerate over the next 12-18 months.